Flour price may go up by Rs 20-25 per 20kg bag

The flour millers are all set to increase wheat flour price by Rs 20 to 25 per 20-kg bag, market sources said. According to the sources, during the last six months, the commodity’s price has been increased by Rs 150 per 20-kg bag and this time around the millers are set to increase the flour price on two counts firstly on account of hike in electricity tariff and secondly on account of General Sales Tax (GST).

The government has decided to increase power tariff for flour millers from Rs 10 per unit to Rs 17 per unit so an overall impact of the power tariff increase for the mills would be around Rs 20 per unit against current impact of Rs 10 per unit. Sources said that the price of wheat in the local market after issuance of an open tender by Khyber Pakhtunkhwa (KPK) government for the purchase of 360,000 ton of wheat has jumped by Rs 200 per quintal from Rs 3,550 per quintal to 3,750 per quintal.

Many dealers of wheat have hoarded their commodity stocks after KP government floated the tender for the purchase of wheat as a result wheat price in the open market has increased by Rs 200 per quintal or Rs 2 per kg. During a visit to local market it was observed that the normal 20-kg flour bag is being sold at Rs 750 against the previous rate of Rs 600, while the fine quality of flour is available at Rs 760 against Rs 620.

The wheat support price was increased to Rs 1,200 per 40/kg from Rs 1,050 by the government in 2012. After increase in wheat support price, the price of flour bag weighting 20-kg is expected to cross Rs 800 in Punjab whereas in other provinces it is expected to reach at Rs 850, said Mohammad Rizwan Awan, a flour dealer.

The millers have purchased wheat from the open market at new minimum price of Rs 1,200 per 40 kg set by the federal government as wheat support price as a result of higher wheat price the flour price has registered an increase of Rs 7 per kg or 280 per 40 kg.

At present, wheat price is highest in Pakistan owing to high input cost and the country is losing markets in abroad including United Arab Emirates (UAE), Afghanistan and many African countries, wherein Pakistani flour millers are exporting huge quantity of wheat by-products. The government from 2008 to 2013 has increased the wheat support price from Rs 600 per 40 kg to Rs 1250 per 40 kg, due to which the farmers across the country brought more lands under wheat cultivation.